BlackRock
Inc. (NYSE: BLK), the largest publicly traded asset manager, said its second quarter
earnings topped estimates as $24.2 billion in new cash flowed into the firm. Net income
rose 23 percent as deposits increased the funds under management to $1.43 trillion.
Profit was $2.14 per share, which beat the $1.97 per share analysts were predicting.
Investors have moved into BlackRock as its funds have sidestepped the worst of the
subprime mortgage collapse and financial sector deterioration. Competitors like Legg
Mason were hit with $19 billion of redemptions in the first quarter alone and forced
to provide $2.15 billion of its own funds to offset losses tied to mortgage-backed
securities.
BlackRock also confirmed that Merrill Lynch & Co (MER) - its largest shareholder
- shelved plans to sell its 49 percent stake in order to boost its capital. This is
good news for shareholders since it means there won't be a large selling pressure
that many were expecting to see.
BlackRock itself is one of the only firms that is able to take advantage of the dislocation
in the fixed-income market while it was able to raise $16.7 billion in additional
funds. The company also garnered $43.6 billion in advisory assets as investors sought
advice on distressed portfolios. Meanwhile, the Federal Reserve picked them to oversee
$30 billion in Bear Stearns investments after it was acquired by JP Morgan.
All in all, those looking for a good financial play may want to take a look at BlackRock
as it remains a very solid play.
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